In the week which saw us accept the 4,000th travel arbitration claim since we took over running the scheme in 2018, Chief Executive Gregory Hunt felt it was timely to provide a new short guide for consumers using the scheme.
Travel disputes can be daunting, but the UK’s robust Travel Arbitration system provides an efficient way to resolve them. Here’s what you need to know:
Introduction to Travel Arbitration
Travel Arbitration is an independent arbitration scheme operated by Hunt ADR. It offers an alternative to court proceedings for resolving consumer travel-related disputes. It includes members of ABTA (The Travel Association), ensuring a more cost-effective and timely resolution.
The Role of ABTA and Hunt ADR
ABTA is the UK’s leading travel association. It oversees travel agencies and tour operators. Hunt ADR operate Travel Arbitration, providing neutral and independent arbitrators to make binding decisions.
The Arbitration Process
Here’s how it typically works:
Application: You can apply for arbitration within 18 months of your return journey if negotiations with the travel company stall.
Evidence Submission: Both parties submit relevant documents and evidence which is then considered by the arbitrator.
Arbitrator’s Decision: An arbitrator reviews the evidence and renders a decision, known as an Award.
Outcome: The Award is legally binding, though an appeal may be possible in specific circumstances.
Cost Comparison: Travel Arbitration vs. Small Claims Court
The choice between arbitration and the small claims court can significantly impact both the time and money invested in the resolution process. Let’s take a look at the costs involved in both options to better understand the financial considerations.
Travel Arbitration Costs
In the Travel Arbitration process, the fee you initially pay is £108 for claims under £7,500 and £135 for claims in excess of £7,500 up to the scheme limit of £25,000. It is worth noting that more than 90% of claims are for under £7,500.
If you lose the arbitration you will have to reimbure the travel company the equivalent amount that you paid to register your case with Travel Arbitration. That means in around 30% of cases the cost would be £216, though often the second £108 is deducted from the Award and not physically paid over.
However, if you win your claim, as c. 70% of consumers do, then you will be reimbursed your registration fee by the travel company, meaning that you will have undertaken arbitration for free.
Small Claims Court Costs
In comparison, the small claims court fees can vary, depending on the claim’s nature and amount – this makes it confusing to explain but we will do our best below with a breakdown of potential costs:
- For cases under £10,000: There are many split fees starting from £35 for claims up to £300 to £455 for claims £5,000 and £10,000. The average Travel Arbitration claim is for around £3,500, so the minimum cost in court for these would be £205.
- For claims over £10,000: The fee is 5% of the claim. So, if you were claiming £10,000 you would pay £500 minimum and if you went to the scheme limit of £25,000 (often these higher figures relate to cruise holidays and family holidays to places like Disneyworld) you would pay a minimum of £1,250.
Clearly, Travel Arbitration is a more cost-effective solution compared to the small claims court. The initial fixed fee of £108 or £135 ensures transparency and affordability, especially for smaller claims – and remember, if you win you get your money back.
While both Travel Arbitration and the small claims court aim to resolve disputes efficiently, the cost difference can be substantial. It is crucial to weigh these factors when deciding on the best course of action for your specific situation.
Special Considerations for Certain Companies
Companies like Love Holidays, On the Beach, and Southall Travel operate outside of ABTA membership. Individual company rules apply.
Appeals and Challenges
Appeal Process: If you disagree with the Award, specific appeal procedures are in place, subject to strict timelines.
High Court Option: You may also appeal to the High Court, though this process can be more complex and very expensive.
Timeline
Expect the process to take 2 to 3 months from application receipt to publication of the award. Sometimes there are delays. For example, there were significant delays following the end of the COVID pandemic due to a huge increase in claims over a very small period of time.
This is significantly quicker than the small claims court, which, as report by The Justice Committee in 2022, on average takes 12 months (51.4 weeks) to complete. This varies depending on your location, but even the the quickest average (Wales at just under 8 months) is still more twice as long as an average than going to Travel Arbitration. In London the average time is 17 months – just under a year and a half!
Conclusion
Travel Arbitration provides an accessible, transparent, and fair method for consumers to resolve travel disputes. Whether you’re dealing with breaches of contract, injury or illness, or other travel-related issues, Travel Arbitration offers a viable alternative to time-consuming and costly court proceedings. It’s a significant part of the UK’s consumer protection landscape and is one of the longest established and most well used consumer arbitration schemes in the world.
For more help and guidance please visit our regularly updated FAQs page.
